Although coercion is a fundamental and unavoidable part of our social lives, economists have not offered an integrated analysis of its role in the public economy. The essays in this book focus on ...coercion arising from the operation of the fiscal system, a major part of the public sector. Collective choices on fiscal matters emerge from and have all the essential characteristics of social interaction, including the necessity to force unwanted actions on some citizens. This was recognized in an older tradition in public finance which can still serve as a starting point for modern work. The contributors to the volume recognize this tradition, but add to it by using contemporary frameworks to study a set of related issues concerning fiscal coercion and economic welfare. These issues range from the compatibility of an open access society with the original Wicksellian vision to the productivity of coercion in experimental games.
We investigate the measurement of three distinct, but related dimensions of electoral competition in a majoritarian electoral system: contestability in the struggle for governing power; competition ...among candidates at the constituency level; and competition among existing parties at the level of the legislature. At each step, the analysis is made concrete by calculating our preferred indexes of these dimensions of competitiveness for 14 major Indian states from 1972 to 2009 (and from 1952 in some cases), while comparing them to others that have been widely used, though not always calculated for Indian states. We also use our preferred indexes to study the importance of the level of development for an understanding of how competition has evolved across the states. The paper concludes by posing questions about the measurement of competitiveness, in general and in the Indian case, that arise in the course of our investigation.
The Redistribution Hypothesis predicts that franchise extension causes an increase in state-sponsored redistribution. We test this hypothesis by considering the relationship between franchise ...extension and selected aspects of fiscal structure at both central and local government levels in the UK from 1820 to 1913. We do so without imposing a priori restrictions on the direction of causality using a novel method for causal investigation of non-experimental data proposed by Hoover (2001). This method is based on tests for structural breaks in the conditional and marginal distributions of the franchise and fiscal structure time series preceded by a detailed historical narrative analysis. We do not find compelling evidence supporting the Redistribution Hypothesis.
Acknowledging the differential ability of individuals to privately mitigate the consequences of domestic pollution for their health is essential for an understanding of their demands for regulation ...of the environment and of trade in dirty goods, and for analysis of the implications of these demands for equilibrium policy choices. In a small open economy with exogenous policy, we first explain how private mitigation at a cost results in an unequal distribution of the health consequences of pollution in a manner consistent with epidemiologic studies, and consequently how the benefits and costs of trade in dirty goods interact with choices concerning private mitigation to further polarize the interests of citizens concerning environmental stringency. The economy is then embedded in a broader political economy setting, and simulated to investigate the role of private mitigation in shaping political equilibria. We show that when citizens can choose between mitigating the health consequences of domestic pollution privately and reducing pollution through public policy, the same polarization of interests underlies equilibrium policy choices in both democratic and autocratic regimes.
Studies of government size usually try to identify the factors that explain what parts of economic activity are brought within the public sector and what parts are left strictly in private hands. ...Modern governments are now so large that the question of what determines the private/public composition, or privateness, of
public
expenditure is of comparable importance for understanding the role of government in society. In this paper, we use a model of the composition of public budgets to uncover the importance of electoral competitiveness and other factors in the evolution of the privateness of public expenditure across the Indian states. These states vary widely in their socioeconomic characteristics while sharing a common political heritage based on parliamentary government. New measures of public expenditure on private targetable goods and of electoral competitiveness at the Indian state level accompany the paper along with a primer on Indian public finance accounting practices in an Online Appendix. The empirical analysis shows that the degree of privateness in India’s more developed states falls substantially with greater political competition and with rising incomes, while in the less developed states it responds more weakly to these key factors and in some cases even inversely.
Population aging has led to demands for subsidization of home care for the elderly, and many countries now provide such help. In this article, we investigate analytically and with simulation the ...fiscal incidence of a cost-sharing price subsidy for home care. Our focus is on incidence and benefit shifting between elderly parents and their children who provide time or money. We first derive incidence indexes on a budgetary and on a welfare basis. We then simulate our indexes using Canadian data in order to understand how incidence actually depends on basic family structure, the nature of altruism, and other key factors. Finally, we simulate the implications for fiscal incidence of a switch from a price subsidy to a lump-sum allowance that allows the family somewhat greater freedom of choice. The article concludes with reflections on the general state of expenditure incidence analysis.
We study the political economy of the environment in autocratic, weak and strong democracies when individuals can mitigate the health consequences of domestic pollution privately as well as control ...pollution collectively through public policies. We consider a small open economy with comparative advantage in dirty goods. With costly private mitigation, income inequality leads to an unequal distribution of the burdens of pollution (in accordance with the evidence). We show that the eco-friendliness ranking of political regime types varies with the cost of private mitigation and that increased inequality has non-monotonous effects on equilibrium pollution levels. In weak democracies, the political equilibrium may be characterized by low environmental standards but highly restricted trade, thus leading to ambiguous outcomes regarding pollution levels.
•We consider private mitigation in a model of trade and environmental policy.•Private mitigation possibilities lead to unequal sharing of domestic pollution burden.•Increased income inequality has non-monotonous effects on pollution.•Eco-friendliness of political regime types varies with the cost of private mitigation.•In weak democracies, lax regulation may be combined with restricted trade.
We present an empirical model of wealth transfer taxation in the revenue systems of the G7 countries—Canada, France, Germany, Italy, Japan, the UK, and the US—over the period from 1965 to 2009. Our ...model emphasizes the influences of population aging and of the stock of household wealth in an explanation of the past and likely future of this tax source. Simulations with the model using U.N. demographic projections and projections of household wealth suggest that even in France and Germany where reliance on wealth transfer taxation has been increasing for part of the period studied, wealth transfer taxes can be expected to wither away as population aging deepens over the next two decades. Our results indicate that recent tax designs that rely upon the taxation of wealth transfers to preserve equity in the face of declining taxation of capital incomes may be, in this respect, politically infeasible for the foreseeable future. We conclude by using the case of wealth transfer taxation to raise the general question of the extent to which the consistency of a proposed reform with expected political equilibria ought to play a role in the design of a normative policy blueprint.
Interregional migration and public policy in Canada Day, Kathleen Mary; Winer, Stanley L
Interregional migration and public policy in Canada,
c2012, 20120127, 2012, 2012-01-27, 20120101, Volume:
223., 223
eBook
Using a unique dataset based on income tax records, authors Kathleen Day and Stanley Winer examine the factors influencing the decision to migrate within Canada, paying special attention to the role ...of regional variation in the generosity of public policies including unemployment insurance, taxation, and public expenditure. The influence of extraordinary events such as the election of a separatist government in Quebec and the closure of the east coast cod fishery is also considered. They look at why we ought to be concerned about public policies that interfere with market-based incentives to move, provide a wealth of information on interregional differences in public policies and market conditions, and examine what other researchers have discovered about fiscally induced migration, culminating in a discussion of the likely impact of various policy changes on migration and provincial unemployment rates. The authors' assessment of the lessons to be learned from their own and past research on policy-induced migration in Canada will be of interest to students of migration and policy makers alike.
We develop and test predictions about the factors determining the competitiveness of elections to the U.S. Senate. To do so, we deliberately abstract away from candidate-specific conditions that have ...often been used to study political competitiveness in order to focus on basic structural features of the electoral landscape. In our framework, party-specific constraints on the ideological positioning of local candidates, linked to the national party organization and its contributors, interact with the heterogeneity of state electorates to determine the number of highly competitive Senate contests. Three hypotheses emerge from this model: (1) the greater the diversity of a party's national legislative delegation, the more highly competitive Senate elections we will observe; (2) states in which the ideological heterogeneity of the electorate is relatively high will exhibit a greater number of highly competitive elections; and (3) highly competitive Senate contests will be more common in states with closed primaries than in states with open primaries. We provide strong evidence in support of the first two hypotheses and some evidence in support of the third.
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